>> good morning, everybody. welcome to "squawk box" here on cnbc. i'm becky quick along with joe kernen and andrew ross sorkin who is joining us from new york this morning, refusing to come back here after yesterday. our top story today, big decisions ahead of the european central bank. the ecb is expected to take action to losing lending decisiones and try and pull inflation out of the danger scope. it's been dangerously low in europe. this would support europe's economic recovery and we can expect an announcement at 7:45 eastern time. that will be followed by mario draghi's news conference. european markets ahead of this decision have been trading slightly higher. just barely at this point. the cac is up by about 22 points. that's 0.5%. other markets have seen more moderate advances. as for the futures here in the u.s., after a modestly down day yesterday, once again, you'll see green arrows here today. the dow futures look like they would open up about 38 points above fair value.

s&p futures up by just over 3.5. the nasdaq up by 6.5 points. also in europe this morning, philadelphia fed president charles plosser pointing at the weather for a blurry economic forecast. >> as you pointed out, it has been very noisy. we've had storm after storm after storm, particularly on the east coast. it's been very difficult to get a decent reading on the economy. i think it's important that we sort of take a step back, be patient here, and not overreact to what's going on because we just don't really know for sure yet. >> the fed beige book yesterday citing the weather's impact on the nation's economic conditions. we'll see if weather is a factor in today's collection of economic reports. at k8:30 a.m., we get weekly jobless claims. the economy is expecting a reading of 338,000 to 348,000 we saw the week before. and at 10:00 eastern time, the january factory orders report will be released. that's a decline of 0.3% is what

economists are looking for there. treasury secretary jack lew will be on the hill today testifying on president obama's new budget. that's coming at 9:30 a.m. eastern time. right now, let's get to andrew with some of today's top corporate mornings. >> what do they say, becky, you can't take the girl out of the city, but -- >> you can't take the city out of the girl. >> i guess i'm the girl here. >> i said he had too much fun there yesterday. he's not coming back. >> one of these days i will. i'm doing a little bit of work this morning. >> not tomorrow, right? >> no. i'll be in d.c. tomorrow. >> so you're not coming back out here? >> nope, he's done. >> take a stand, man. take a stand. i'm with you on this. >> thank you. >> where are you? >> i'm at 30 rock this morning. >> oh, you're even going right to "today" show type quality. you deserve that. >> let's get you caught up on the headlines this morning. >> looks like the same suit. uh-oh. did you do the walk of shame

this morning? >> it's a different suit. it's a different suit. >> i know where andrew was last night. i saw him last night. >> now you're going to start rumors. >> really? >> after the show, you guys just never -- >> wow. >> let's get you caught up on the headlines this morning. we did speak with the king of activist investor carl icahn about his battle with ebay now linking co-founder reed hoffman. he helped engineer the ebay/paypal deal. the senior vp of payments had this to say, if we assume that icahn really does care about creating long-term stockholder value, as he insists, then the true issue isn't what sort of short-term pop he can engineer for ebay's stock price or what size premiums paypal might fetch from auto company. the true issue is what conditions are most conducive to

paypal growing increasingly valuable over, say, a ten-year time frame. when you think about a ten-year time horizon, then you think about our friend, carl icahn. i don't think that carl thinks in ten-year time horizons. it's just a different thinking process from sort of a valley versus where we are here a little bit. >> well, we'll ask him if he -- you know, like i told him, if you just -- even if you wake up, just, you know, do what people like carl -- or do what he does. just call in. just say, oh, i'm up for a second, let me just call in, right? >> we would always take calls. >> he always has something that he's thinking about, probably. remember that king farm suit yams deal, that he literally told -- that was years ago. it was the old squawk or something. but he said he was shaving and he had the tv on and he heard something about they were selling. he goes, what? that's where he got the idea, watching "squawk box" in the morning. but i don't know what he was doing up that -- he must have

had a meeting that morning, too. >> squawk used to be on later, too. >> but if he gets up early, there must be a deal or something. >> his managers are saying, shhh. >> you know, the chair is so empty. >> i'm right here. >> you've got your jacket on and the thing. >> the pocket. >> yes. >> darden canceling an investor meeting slated for march 28th. the company is instead going to meet with analysts and investors individually. the company believes one-on-one group will be more productive. the company recently reiterated its plan to spin off or sell reasonable doubt red lobster.

both have pressured the company to rethink those plans for red lobster. >> isn't the one called seasons 52? >> i don't know. >> it's a big -- they have healthy, local food that they look up. pretty good. earlier this morning, warehouse operator coastco prorted a 15% decline in quarterly of thes. the company was hurt by some of the weaker growth margins. the company's profit fell to $463 million. analysts were looking for $1.17 a share. sales rose, but that fell short of estimates. shares of costco are trading around $115 a share, just off of its all-time high. it's very unusual to see a miss like this for costco. u.s. safety regulators are demanding general motors turn over documents and other data showing what the company knew

and when about dangerous ignition problems that were linked to this 13-car crash -- or 13-car crash death that we were talking about. the national highway traffic safety administration is investigating how gm handled the problem which triggered -- we were talking about the recall of 1.6 million older compact cars, g-something from pontiac. but it was worldwide. gm acknowledged it knew the troubles a decade ago, but didn't recall until last month. a decade ago? >> yeah. you wouldn't think ignition problems would cause fatal crashes. the data is due on april 3rd. gm is cooperating with that investigation. andrew. and the eu holding an emergency summit on the crisis in ukraine. julia chatterley joins us now with brussels on this story. good morning to you. >> good morning. this is all a sense of urgency here for the eu leaders in brussels. i just spoke to the lithuanian

president. this as -- from the former soviet block. and their president said to me that russia today is unpredictable and it's dangerous. and they're trying to reshape their boundaries. and quite frankly, europe aren't taking this seriously enough. what kind of sanctions are we looking at? a symbolic embargo on arms, suspending trade talks. how much does vladimir putin really care about these things? not at all. why aren't we talking about more stringent sanctions? because europe is reliance on russian independent energy. a third of our gas comes from russia. and the bottom line here is it's actually easitory give money to the ukraine than it is to hit russia where it hurts. in the last few minutes, actually, here the game has changed again. the crimean parliament over in the ukraine has voted to join the russian federation. what does that mean for the eu

powers as far as russia is concerned? we don't know. the leaders here discussing what that's going to mean for the ukraine and for russia, too. on that note, guys, back to you. >> julia, thank you for that report. guys, i don't know if you saw this last night, but you have to see in this morning. we've got a piece of video to show you. this is an anchor for government-sponsored russia today, known as rt, quitting live on the air. her naz is liz while. she announced her resition naz following recent comments from a fellow anchor who denounced the russian government for taking in ukraine. >> that is why personally i cannot be part of network funded by the russian government. that whitewashes the actions of putin. i'm proud to be an american and believe in disseminating the truth and that is why, after this news cast, i am resigning. >> wow. wow and her name is wow. she is a washington-based

anchor, american anchor. she noted her grandparents came to america as refugees escaping soviet forces during the hungarian revolution in 1946. but one of the on questions this raises for me, larry king happens to have a show on rt. and i'm wondering if he's going to comment on all of this or stay with the network, for that matter. >> larry king might be interviewing her at 9:00 on cnn if things go as planned here or if they bring him back. i'm shocked, shocked that there's whitewashing going on with this company that i've been working for for, you know -- that looked like a publicity stunt. >> a publicity stunt for her. >> yes. and i saw that yesterday. i was not -- she didn't know that she was disseminating propaganda? how long does she work there? >> no, i'm sure she did, but at some point, it probably got too far, right? >> i don't know. i don't know. >> when putin is the ceo of your

company, i guess that's -- >> that's the way it's been for a while. she knew exactly what she was doing and she knew it would go viral and here we are talking about it. >> looking for a job, so, there you go. >> i saw it yesterday and i wondered where it was. and i thought it was here and then it was over there and it's like cable access over there, anyway, isn't it? >> yeah. although if you're still in the country it's more risky of a proposition to be doing rather than doing here. >> but this is rt america that she was on. >> right. but -- i don't even know what -- that's where larry king does that once a week or so, right? >> i think it's a weekly slow and it's rebroadcast online. >> he's an inspiration, larry. >> he is the energizer bunny. >> he is. he's an inspiration. and he's still in demand. that's classic, yeah. let's get a check on the markets this morning. as we showed you, the futures

are looking more positive. they are back up 38 points for the dow futures after modest declines yesterday. take a look at what's been happening with oil prices this morning. right now, wti down by just 11 cents. but back at 101.34. this is off the highest levels that we've seen since tensions started heating up in ukraine. if you take a look at the ten-year notoriety now, the yield is unchanged at 2.707%. this is similar to what we saw yesterday. the ten-year was hanging right around 2.69% all day. it's caused steady issues for both the dollar and gold yesterday after some of the volatility that we've seen recently. this morning, the dollar is down against the euro at 1.3745. it is up against the ruble once again and gold price these morning down by just about 4 bucks. $1,336.40 an ounce. coming up, making millions on ebay by shoplifting. it's kind of a touching story of a family business. plus, nike about to unveil

big news about the world cup in brazil this summer. ceo mark parker is going to talk about that exclusively during "squawk on the street" today. ameriprise asked people a simple question: can you keep your lifestyle in retirement? i don't want to think about the alternative. i don't even know how to answer that. i mean, no one knows how long their money is going to last. i try not to worry, but you worry. what happens when your paychecks stop? because everyone has retirement questions. ameriprise created the exclusive confident retirement approach. to get the real answers you need. start building your confident retirement today.

welcome back, everybody. right now, it's time for the executive edge. the law and order edition.

a california businessman was convicked of stealing trade secrets to help a company. a jury found waulter lou gmt on over 20 counts, including conspiracy to commit economic espionage and trade secret theft. u.s. prosecutors contended lou revealed trade secrets to help a chinese company create a pigment known as ti-02. that pigment is used to make a variety of white products including paper, pigment and paint. >> my question is this a story that is reflective of china and what goes on in china in terms of all the issues in terms of stealing our intellectual property or is this a sorry about one incident of this and business trying to figure out what the other person is doing? >> what's worse, do you think, to think? how much money would you make doing that?

i wonder what china paid him. >> a lot, probably, because this is very valuable. >> yeah. >> wasn't this a situation where this was happening in the united states? because we have heard of a few situations where -- i believe there was an agricultural company this happened to about a year or two ago. my guess is over in china, it's much easier and it happens all the time if you're an american company or a foreign company operating in china. these are a little more intriguing because these couple of cases, auto the idea that it's happening on our soil. >> i also wonder if it's a gray area where, yeah, i knew how to make this. it's not proprietary. >> but weren't they paying off these other people? >> well, paying off, that's a -- in one man's -- >> look, if you're going to protect the coca-cola recipe for

82 years or whatever, i think any of these things are trade secrets and intellectual property. >> this is pretty boring, right? what does it make, white paper? >> it's aren't important way of getting ahead. if it's worth paying for, you have to figure it's valuable information. a family business gets busted. a couple and their daughter were charged with operating a multi million dollar shaft lifting ring that involves stealing items from retail stores and turning around and selling them on ebay. the trio were charged with transportation of stolen property. according to investigators, they stole more than $7 million worth of american girl dolls, ferby toys, baby monitories, steak knives, all kinds of things from an array of retailers over the last decade. they were napped after a theft prevention group tried to figure out where the items were stolen

from and traced it back. >> everybody needs a family activities to do on the weekend. >> she had a skirt, a long, black skirt with lining. and they would work together. the husband and the daughter would create a diverse. >> it's a bonding thing. it's a mother/daughter bonding thing. sgldz 7 million? how can you carry $7 million worth of stuff in your skirt? >> they shop lifted that stuff and made $4.2 million and they did it in all these different states. >> did they line their clothes with tinfoil? >> no, a black dress that had lining and it was a long, black dress. then the other two would create a diversion zsh would flee. >> wow. crime doesn't pay. >> do they all get to go to jail as a family? >> no. they don't keep women and men together in the same places. >> anyway, crime doesn't pay.

that's why you have to stay in school and to do that, you have to get good s.a.t. scores to get there. the s.a.t. college entrance exam is getting its first makeover since 20505. the change is coming in 2016 include make the s.a. optional and no longer penalizing students for wrong answers. these changes come as the s.a.t. has been overtaken in popularity by the a.c.t., which has long been considered more curriculum based. so they're trying to bring things around. the s.a. came after i took the s.a.t.s. >> i'm glad they're coming back to the 1500 number, because all of these kids who were telling me they would got these huge scores and then i would feel bad for myself. >> you need to know how you changed it. i didn't know they changed frit 1600. >> from 1600 to 2400. that entire group of kids -- was that 2005 to now? like eight years of kids who -- they're going to have scores that don't match with anybody

before or after. >> now we know which kids to really hate again, too. >> right. the 800s. >> there are kids that get 1600. one of my good friends had an 800 in math. i don't like him to this day because of it. >> apparently, by the way, harder to teach to the exam. caplin, princeton review, all the courses out there that teach to this, this new test will be much harder to game the system, if you will. >> they also announced, yesterday -- i believe i heard this -- they're going to be doing something in partnership with the khan academies, those classes taught online, that will make it available for all students to get access to the same information, which is great. i thought that was a great equalizer. you could make for an s.a.t. prep course or something. that would cost money and not everybody will have the equal access. but if you can get access to khan academy and everybody has the same ability to study up on

these things, i think that would be a great equalizer. >> but testing and getting personalized for wrong answers, it's all so -- i mean, i see the way the entire country is going, so it's also cruel to make people get things right and understand stuff. >> there is some tougher stuff, too. you have to back up why -- >> but it's hard to get -- if you start testing to see what students are learning in schools, then you're going to have accountable with the teachers because the ones that aren't teaching well, you're going to know who they are. you see the huge pushback for any type of accountability because it messes up tenure. but the whole thing is -- i don't know. there were times where you used to get a ruler across the knuckles if you didn't know something. but now you can graduate high school and not even read. >> i was never hit on my knuckles, my rear yebd, i never did any of that. >> you were a goody tooshoes.

>> you didn't have sister mary -- they didn't hit me. i'm kidding. >> you just wish they would have. let's get to the weather. is spring going to arrive on the east coast? let's get the forecast from the weather channel's alex wallace. >> good morning to you. we've got some spring rains to deal with here this early morning across parts of the south and showers leading through mississippi. that issing going to track across florida and up across parts of the southeast coast, slinging in some moisture, meaning wet weather, is and even some storms along our cold front which will be marching its way through the sunshine state. some of those storms could pack a bit of a bunch. meanwhile, looking for a bit of a warm-up? i think we'll get it here into parts of the northeast for the weekend. we're not talking balmy '60s and '70s, but it will be much better than where we have been with those 20s and thirds. heads up for the weekend.

things looking milder from boston down to d.c. andrew, back to you. >> thanks for that, alex. when squawk returns, the markets play the waiting game between the ecb today and the jobs report tomorrow. plus, we're going to dig into costco's earnings report, the retailer missing expectations. we've got that story when we come back. as we head to the break, take a look at yesterday's winners & losers. about business internet?

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good evening and welcome back to "squawk box" here on cnbc. i'm joe kernen here along with becky quick and andrew ross sorkin. russian foreign minister sergei lavrov and u.s. secretary of state john kerry are going to

hold a second meeting in rome today after talking in paris yesterday. that's not a bad gig old kerry has. kerry tried to convince lavrov to meet his ukrainian counterpart yesterday, but was unsuccessful. so i said, hey, how about rome? unsuccessful european union leaders appear to be set to issue warnings to russian in ukraine, but to not impose any sanctions. and one of our friends and squawk guest hosts dallas fed president richard fisher is continuing his against the bond-buying program. he said the program is distorting markets and encouraging risk taking. and one of this morning's early losers, office supplies retailer staples reported quarterly profit at 33 cents a share,

missing estimates. staples was hurt by a 7% trop in same-store sales. you know what i got today? >> what? >> a christmas card. >> did you, really? you complained about it enough that he -- >> from particular cook. >> he made sure he sent you one? >> he made sure he sent me one. said he really did send you a -- >> this is from tim cook, by the way. joe has been bitter that he didn't get a christmas card. >> he's dealing with icahn, he's trying to figure out -- >> and you complaining and he took the time to do. >> that's the sign of a good ceo to be able to keep all these -- you know the important things keep the -- all the dishes in the air at one time. although, you know, if he's watching, my birthday was january 6th. >> and you sent him something for his birthday, i'm sure. and a christmas card. >> i think that he can't -- anyway, what --

>> what can you do for me? >> yeah, exactly. but i'm just saying january 6th came and went and maybe that's lost in the mail, too. no, it was nice of him. >> very nice of him. anyway, let's get a check on the markets. we did show you the futures have been a little bit higher this morning. yesterday, things were lower, but not by a whole lot. this morning, the dow 2350u6r7s liked like they would open up about 37 points above fair value. yesterday within we got the adp private payroll numbers that showed a much smaller gain than had been expected and that is leading to concern as to what to expect with the big governments report coming friday. today, we'll be getting jobless claims. maybe that would give us some indication. it will show us more about what's been happening with the jobs and the weather situation. if you watch wag been happening in europe, you'll see stock res slightly higher, picked up a little bit of ground. the cac is up by 0.6%. the ftse is higher as is the dax and germany. in asia overnight, the nikkei is

up by 1.6%. the hang seng and the shanghai closed higher. oil prices down by about 21 cents to 101.24 for wti. and the ten-year note has been sitting right around about 2.7%. still there, 2.71%. the dollar has been a little bit stronger, or it was earlier. you can see it's stronger against the ruble, down against the euro. it's up against the yen at 102.65. and gold prices have actually dropped by just about $5. $1,335.20 an ounce. >> his birthday is not until november. >> so you missed it. >> no. he didn't send the christmas card -- we didn't start exchanging cards until christmas. >> and you sent a christmas card? >> well, i didn't know he was going to send me one. but now i know. now he will be on my list. >> all right. >> he's a young guy. unbelievable. >> how old is he? >> i don't know. born in 1960. anyway, the markets -- party of one. the market is coming off a mixed

session. which draws the s&p 500 set another record interday high before finishing basically unchanged. we're just a day away from that big jobs report. joining us now is mori harris, chief economist at ubs. for us, maury, if everything that we talk about, we just say it's the weather, it doesn't make it that interesting to talk about it. is anything rather than weather going on here in your view or can we just assume that the way the economy was sort of idling prior to all this weather we're sort of in the same period right now? is that what you think? >> well, i think we're in a growth pick up this year to around 3% gdp. the numbers right now, of course, are affected by the weather. so what you need to do is to look at some of the types of numbers that generally are not affected by weather. the most important ones are the confidence numbers. and the consumer confidence numbers have generally held up pretty well. to me, that's a critical sign.

when you ask consumers how is the labor market, they're telling you the jobs are getting easier to get. so these public perceptions aren't -- i think are probably more important than statistics like these where the purchasing agents are telling you that there's a lot of weather effect there. >> yeah. confidence, what's the biggest boost of the day? i mean, i figure if you know your -- you know, if your house is not under water, that helps, right? if you know you're going to be able to keep your job, that helps. but what else? >> well, i think one of the most important things is what you said about the real estate, that two-thirds of american families still own their hoemd homes, not as many are under water. that was such a major development to go four years with falling house prices to finally see those turn around. i think at the margin, that was a big plus for the consumer. >> maybe we shouldn't

underestimate that the fed has been exiting, at least starting to, and the ten-year has been very well behaved. i figure mortgage rates, they may have gone up a little from a year and a half ago, but they were all behaved. i mean, so far, so good with trying to get out of this, right? >> well, the important thing to keep an eye on this month will be the mortgage applications. we're heading into the spring selling season. the margin rates are about one percentage point higher than they were a year ago. i think it's going to be an okay spring selling season because confidence is up. i think the jobs are going to come back in the spring. but the jury is still out on that one. so these mortgage applications that are an indicator of sales are very important to watch over the next few weeks. they went up last week. i know they're going to continue to go up. but keep an eye on that. >> these young people need a bit of a history lesson for -- because they're -- what's the mortgage right now, maury?

>> the mortgage rate is around 4.5%. >> they need to know that that -- >> my parents had a massive interest rate. >> i mean, if they think, well, it was 3.5%, now it's 4.5%. and on the s.a.t., they're making that easy now. >> to have 18% mortgage rates? >> i want them to know that 8% and 9%, that used to be the norm and we got scared at 15%. >> that's right. and what's important so look at is affordability. the houses, because prices have gone up and rates have gone up, monthly payments are up over the past year. but when you look at historically what the monthly payments are for new loans versus income, it's still a pretty good bargain to buy a house. >> yeah. i would think so, too. do you have any fear that -- i mean, when is this shale revolution going to give us the tax break with energy prices that we're all hoping for, do you know? >> well, i think you're probably

going to see -- it was, of course, away from the natural gas prices when you head out into the spring weather. but we've seen a tremendous amount of, you know, exploration activities and discovery. i think you're probably going to see some downward pressure on west texas intermediate and your natural gas prices over the summer. partly because you're turning on a lot of what they call the tight oil that comes from the shale boom, these shale deposits. >> all that sets us up for what -- i mean, there's a lot of -- you would think more tailwinds than headwinds to get to the 3% number. unless there's something we're not thinking about and we just wouldn't know at this point because of the weather. >> well, i -- look, if you say what do i worry about the most, i'll get back to those mortgage applications because they have been very weak. i think they're going to pick up. they picked up last week. but in the next month or so, if

something was to go wrong, it would be that we start to get indications that the spring selling season for housing is not going to be a good one. i think it will be a good one, but that's what i worry about that could go wrong in the near term. >> and i guess external things, like over in europe and ukraine and whether, you know, the low inflation or deflation in europe, those things are also something to watch. but they're -- you know, they're not paramount in your mind right now. >> well, look, your european pmis, you know, suggested that, you know, europe is really starting to, you know, snap out of this recession. and that if anything, the low inflation in europe has helped out because it's helped people's purchasing power. in terms of the event in ukraine, this certainly imparts from volatility to the stock market, but it doesn't have any basic effects of the u.s. economy other than to gives some wild days in the stock market.

>> maury, thanks. we appreciate it. see you later. coming up, we've got an analyst reviewing coastco's quarterly results. plus a check up on obamacare's enrollme enrollment. find out where james dinan of york capital management is making his money in a very exclusive interview. that's coming up in the 8:00 hour. we're back in just a moment. tdd#: 1-888-648-6021 there are trading opportunities

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welcome back. a very busy squawk planner for thursday morning. the bank of england and the ecb, they're both going to announce decisions on interest rates. that's going to happen during the 7:00 a.m. hour. the economic calendar, weekly jobless claims and the latest numbers on productivity, that's coming at 8:30 a.m. eastern time. we'll bring that to you, as well. and then the factory orders report for january is is going to be released at 10:00 a.m. eastern time and that is your squawk planner. becky. when squawk comes back, we're going to head to coastco. did sales get a case of frostbite? margins were also hit. we'll talk more about that after this. >> announcer: tomorrow on "squawk box," it's jobs friday. expert analysis before and after the data hits the wires. plus, former federal reserve chairman alan greenspan on the state of the economy. and the job janet yellen is doing since taking over for ben bernanke. a big friday for the markets, so

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welcome back, everybody. coastco number costco numbers out this morning. numbers on the top line and the bottom line hurt by a drop in profit margins in several categories. i have to say, jim, these numbers were pretty surprising. you don't normally see a miss like this from costco. what happens? >> well, you know, every morning when i open up my browser, i look at the merriam-webster word of the day. today's word was susayer and it didn't have my picture next to it pp nobody on the street was as low as what they reported. it was very tough. >> they talked about their margins, not only in fresh fruit, but some of the non-perrishable items, too. it caught a lot of retailers by surprise.

is that what happened here? >> i looked at that this morning and said wasn't this obvious that this was going away problem? walmart was down and dirty on pricing. target was tough on pricing. costco does sell apparel. macy's was down and dirty. everybody was tough on pricing. so i guess it shouldn't have been a surprise that it was tough on them, as well. we see their sales monthly. their sales looked fine, but inside of those sales, the mix was obviously very tough. and february was okay on the release just now on sales. it wasn't great. >> and i guess they don't give stuff on these monthly sales releases. they just don't talk about the margins or what they have to do. what surprises me is the stock has not been hit very hard by this. should it be? >> no, because -- >> as i tell you all the time, they're the world's greatest retailer. and when they have a miss, it's a huge on opportunity for all those people that want to own it

that couldn't buy it because its multiple was 25 times or 21 times or however you want to calculate it. and when you look at that, you say, okay, i can't buy it, it's too expensive. but i know i love this company. i know they're going used to sa walmart, that they're the world's best retailer. i said it about target since '06 and since i've been saying it about costco. all these people who look at it and go, i can buy it on sale, i should buy it now. >> what about the weather? that doesn't seem to be a huge problem, but it has been for a lot of retailers, including staples just this morning. when do we get to the point where you can measure companies other than by weather. >> thank god they didn't mention the weather in their release. every other retailer did. i think we all have to believe the weather kept people from shopping and it kept them from -- it allowed them to buy some things cheaper, right? because other retailers had to promote. anytime anything like that

happens, it has to affect a company like costco. i'm still surprised it affected them so much. >> in terms of weather overall, though, we heard from macy's when they came out with their earnings release. i look to them because they've been a stellar operator to this point. terry lundgren talked about how 144 stores were closed for weather. what do you think in terms of the weather again? when can we get back to looking at these guys? is it the economy underneath that going to be okay once we get through the winter? >> you know, i have contacts on the ground in asia i talk to all the time about what's going on in supply of retail. there have been lots of cancellations in asia for spring goods, current goods already. so retailers have looked at this and they said, man, i had a tough first two weeks of february. it got better at valentine's day and for a little time thereafter, then it softened up again and it's been soft right

into march. we will get better weather. but i don't think until weather gets warm, i don't know about your house but if my house still has a foot of snow in the yard -- >> a foot? >> something like that. >> we have five feet banks still. >> drifts. the stuff that was shoveled. >> when we get to that -- >> 18 degrees this morning. >> you can't buy swimming suits. you don't buy spring shorts when you have five feet of snow in your yard. i think as that normalizes, around the country, because it's not just here, we'll see normal selling. i think the normal selling for 2014 including the back half will be good. back half of 2013 was of course hugely negatively affect by the weather. it had all the problems going on

with the higher social security tax, all those sorts of things that have affected it. we should see the mirror image on the back end of 2014. if we see the mirror image you would think the back end absent something going wrong in the economy should be good. >> aside from costco, what do you like? you don't see big discounts on some of the names. >> i'm always a fan of macy's. i think they're a best in class retailer. anytime you should buy them at a good price, you should buy them. i like costco. i don't think that will change. i don't think there's something fundamental that changes my view on that. right now i like walmart. i believe they are fundamentally going back to what walmart has always been and always done well. >> every day low pricing? >> every day low price, have the thing you want in stock. now they're becoming an omni channel retailer. macy's perfected that, nordstrom's perfected that.

i like nordstrom's as well. you have to be that to really be good today in those kind of categories. walmart is doing $10 billion already online. >> right. >> they're the biggest threat to amazon. and they can do that out of 3,000 stores now when it comes to distributing to you and being closer to you. and they're very, very cheap. so can they win the battle? i don't know but they can make life miserable for everybody else when they do omni channel retailing. >> jan, thank you very much for coming in today. >> thank you. >> andrew? we've got a story coming up that you have to see. you can only see it right here first on cnbc. we talk about bitcoin around the table. how about the hunt for the man that actually started the virtual currency? we have that story next. and that man has been found. and a checkup on obamacare with dr. zeke emanuel. "squawk box" returns with all of that in just a moment.

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down. "squawk box" begins right now. good morning, everybody. welcome back to "squawk box" here on cnbc. i'm becky quick along with joe kernen and andrew ross sorkin. the futures have been indicated higher this morning. dow futures up about i 33 points above fair value. yesterday you said you saw the markets give back a little bit. that came after massive gains with the dow up 220 points. the ten-year note continues to yield to 2.712. in our headlines this morning, we have a busy day for economic numbers. even as investors look ahead to tomorrow's february job report. we have initial jobless claims an revised fourth quarter gdp. fourth quarter productivity i should say. both out at 8:30 eastern time. later in the morning, we'll be getting the january reading on factory orders. the crimeaen parliament approved a referendum to be held

on march 16th on whether the region should become part of russia. no response yet from ukraine's government. yesterday, the prime minister said crimea would remain a part of ukraine. directv is in talks with disney. they are seeking the right to offer disney con ten as part of an internet-based product that could be accessed on smartphones, tablets an other devices. andrew. we spoke carl icahn just yesterday about the battle with ebay, now linked in co-founder reed hoffman is jumping into the debate. he helped engineer the ebay/paypal deal. he had this to say. he said it on linked in. if we assume that icahn does care about creating long-term stockholder value, aas aa aas t insists then, the true issue here isn't what sort of

short-term pop he can engineer. the true issue is what conditions are most conducive. to paypal growing increasingly valuable over, say, a ten-year time frame. also in the news this morning, darden restaurants cancelling an investor meeting slated for march 28th. the company behind olive garden, capital grill and red lobster. the company believes one-on-one sessions will be more productive. barrington capital group has been pushing darden to put more mature olive garden and red lobster into one company and its higher chains into another. both have been pressuring the company to rethink plans for red lobster.

joe, over to you, because i wish i could be with you. i couldn't get the chopper in the air this morning. a poll his. >> i already explained to lea you would be doing this interview if you could pronounce the guy's name. we didn't want to try that. he's japanese. the story about bitcoin is a man named satoshi yakamoto. lea mcgrath goodman joins us now. even before i read this, there's a lot of intrigue even to get to this point, right? a lot of ground work. we'll get to these quotes. this was like cia type stuff almost, right? >> yes, the field of candidates was massive. it really was overwhelming. i had a team of forensic analysts helping me. sharon sergeant and barbara matthews.

he had written all these posts but nobody knew how to match up what he was saying. >> it reminded me. before anyone knew that. anyway, here's a couple of quotes from the story. he said i'm no longer involved in that. he wouldn't say what that was. he was referring to bitcoin. i cannot discuss it. he also said it has been turned over to other people. they are in charge of it now. i no longer have any connection and i guess -- you could put electirodes somewhere. >> he acknowledged it. he call the cops when i came to the house. and acknowledged it. we had a breakthrough moment. the dots were connecting but there were a couple of big voids. one of them was his career expertise. we could see clearly where

family members his had a career path and yet we couldn't see what he had done. and his brother called me from out of the blue and said, he's been involved with major corporations and classified work and a lot of government classified work. and you will never get him to admit anything. he'll never admit. >> why did his brother tell you that, though? that's kind of shocking. if it's classified stuff and i don't want anybody to know it, i'd be mad at it. >> why does he need to be anonymous about this? >> the brother and him don't get along very well. he just called and ranted and hung up the phone. he didn't do an interview. as for why? people close to him have said that he has long had a mistrust of authority. he immigrated at a young age from japan. not long after world war ii to be honest. he's 64 years old. there's a lot of distrust in the american community in california, as you can imagine, after world war ii.

he had other experiences that made him not trusting the authority. >> is he a major holder of bitcoin, as the inventor of this stuff. >> we understand from the chief bitcoin scientist that he holds 800,000 bitcoins, a little more than that. they're estimating around 1 million. so he holds quite a bit of bitcoin. whether he still holds it. >> that's $400 million, right? >> yes. >> it fluctuates so rapidly. >> he's living in that house? >> what? >> and he's still living in that house with his $400 million in bitcoin? >> yes. he's still living -- he lives a humble life. >> has really nice furniture. >> i guess what's weird to me, he said he turned it over to people. i thought the whole point of bitcoin is that nobody controlled it and it's out there on its own at this point. what did you think? would you buy bitcoin? >> would i buy bitcoin? even the bitcoin developers say

they use bitcoin as more of a discretionary on the side, giving and saving and just, you know, more not for serious parts of their lives. most all the bitcoin developers have bread winners elsewhere in the crowd. the chief scientist has a wife that's a professor. >> did he actually write the code for bitcoin? you said scientists to help with this, right? >> yes. he had a number of developers who stepped up and heard about the project. it was highlighted on cryptology blogs. >> people stepped up and offered to help when they heard about the idea. he was the leader of the project. at some point he decided to move on from it and he turned over more or less the master keys to just to five people.

it is a lot of people's project. >> it makes sense if you think of the guy who would come up with an idea like this, it would probably be somebody who is just like this who doesn't want to be on the grid who was nervous about a lot of things and thinks you need a different currency than the one manipulated by governments. i hadn't thought about it but it made sense. >> dirty word, manipulated, that you just used. >> if that's your view of the world. >> do we know why he got out of bitcoin, not so much as a holder but just being part of it and why he wanted to be anonymous? >> he never considered this was going to be as big as it became for one thing. if you look in the article, in "newsweek" today, there's a list of all the government agencies involved. i can see why anyone who's, you know, looking to relax, he's a great lover of technology, nature, engineering and he has a lot of other hobbies. i don't think he wants to get involved in all that. >> as you said he had an

aversion to government and authority. now they own it all. it's almost like backfired that now he's even closer to government. is this his fake name that we're using or real name. >> that's another good point. he changed his name at the age of 23 to dorian. >> to what? >> dorian prentis. he goes by dorian nakamoto. >> do we know the genesis of dorian? there must be a literary reference or something like that. >> it would be interesting if it was dorian gray. >> does he have a picture in his attic? >> he looks pretty young. you know, hard to imagine he's 64. >> crazy story. >> another story just coming out this morning about this american ceo autumn -- i want to say redkin. committed suicide in singapore back in february. to me, between mt. gox going out

of business, between this suicide, between a couple of these other exchanges, and then you meeting the head -- it just seems like we're in this sort of bizarre-o secret society. >> if you're not going to step up, sorkin, i'm going to call ben mezritz. >> someone should write this book. >> this is a ben thing. he gets all these offers. what about that. >> you have an author sitting next to you to write this book. >> my hunt for the bitcoin founder. >> yes. >> yes, it looks like bitcoin has claimed its first victim in singapore. i believe -- i don't know if andrew you want to let me know was she found in her bathtub? >> excuse me. >> it said she was found hadder in bathtub on the 28th of february. >> yes, i'm reading the same story. on february 26th she was found. they said it was an unnatural death. they haven't said much more than that.

but they also say no foul play is suspected. i'm assuming that means that it wasn't a murder, it was a suicide of some sort. unclear -- the company itself saying that there weren't problems with the exchange but other people saying there might have been problems with the exchange. it just seems that we're in some kind of -- i feel like i'm in a movie of some sort. >> a novel. it does sound like a novel. >> it does sound like a movie. imagine a man saying i'm going to invent a currency, go to my office and do that now and pretty soon banks and hedge funds and the financial times and cnbc will all be talking about it and investing in it. you would call that person crazy. yet this is exactly what happened. this is much more than a science fiction novel. you wouldn't believe it if you read it. >> is there a sense of what the inspiration was for him? finding him unto himself is the story. is there a back story in terms of how you think he got to that point? >> he did it because he could. he seemed to enjoy the problem

solving aspect of it. i don't know if he thought that he would be pulled into the politics of it. i know that he definitely has some very strong views about politics. and i read a number of things that he's written, not just under both names. his world view is very unique. he marches to the beat of his own drum. >> what do you mean? >> he's a practical, curist philosophy. he definitely has thought about money and secrecy for a very long time. >> and what was your -- you said there were a lot of dots. what was your first dot? how did you start? what was the first thing you did to try to find him. >> the first big thing is when we found in the archives when there was a nakamoto that changed his name. we found other posts from him, not just under satoshi nakamoto

but the name he used now. from there it was does he have expertise in something that would allow him to make bitcoin. that was a big void for a while. then we found an unclaimed bank account from an american express nortel networks account. that made it seem like he worked at nortel at one point. seemed like a good lead. his brother called that was a big breakthrough. so on and so forth. just these series of events. i don't think he would have admitted to anything if the cops hadn't been at his house. they asked me, what do you want to say to this man? he thinks he may be in trouble, he doesn't want to talk and he's worried. >> this sounds like true detective. >> exactly two weeks ago i was in temple city. >> were you up nights, poring over weird stuff? >> yes. it's an obsessive project until

it's done. even until the moment we met i didn't know what to think i was ready for anything or for a cold lead to be honest. everything was leading to him. >> are you sure it was his brother who called you? >> yes. yes. >> he said -- you had the number? >> i talked to a large number of those close to him. they all sort of corroborated each other. i just want to say i'm really glad to mark the "newsweek" relaunch. >> yes, congratulations. finally back out in print. >> this is the first time i'm seeing it. i grew up in "newsweek" in my house. i read it obsessively. it had all this politics -- >> it's back in print. i'm amazed. i'm still amazed. jim, i think he's still blown away, he's our editor in chief and he led this whole effort. >> congratulations on the story and being back in print, too. >> thank you. thanks for having us. >> great to have you. >> andrew? awesome story.

congratulations to jim, who was my former editor at "the new york times." and also helped with two chapters on "too big to fail." next, less than 30 days to sign up for obamacare. up next, dr. zeke emanuel who advised the white house on that legislation when we return.

welcome become, everybody.

let's take a look at the futures right now. so far this morning, things have been in the green. the dow is up over 40 points. the nasdaq is up by close to 6 points. andrew, i'll send it over to you. >> thank you for that. so far, more than 3.5 million people have signed up for private health insurance plans through federal and state exchanges since the affordable scare act was passed. dr. zeke emanuel has a new book out on health care in america. it includes a behind the scenes look at drafting the affordable care act legislation. zeke joins us now. we're thrilled to have him. good morning to you, zeke. >> nice to be here. thank you. >> lots of questions from this book and in the news. let's start with the news and i want to get to some of the issues in the book, very provocative views about what the future will look like. on the merits of where we are today, given we just had this announcement yesterday, at least parts of obamacare will be delayed again through 2016. >> i think it's a minor part. this is private insurance plans.

people who have been on them continuously can hold them for a couple of more years. it affects, according to the rand think tank less than 500,000 people in america. i just don't think this is a major part of the bill. we get wound up in a few very important stories and some people who find that they can't afford new insurance or don't have -- haven't explored the exchange. >> let's talk about that transformation. one of the predictions you make in this book is the end of employer-sponsored health insurance. you say that could happen by 2025. fewer than 20% of workers in the private sector will receive traditional employer sponsored health insurance. it seems to me we are suggesting to either a single payor or

government sponsored medical care. >> no, andrew, don't -- we're still going to have the market. look, right now, private employers like mine at the university of pennsylvania, there's no law requiring them to give health insurance. they give health insurance because i would have a hard time individually getting health insurance and it's much cheaper for them to provide it because of the pooling effect. now you have an exchange which will have good health care plans, allow people to choose at various tiers and for people who can't afford it you'll have subsidies. that allows big employers to say, look, i'll give my workers a wage increase or a voucher. they'll go into the exchange. they'll decide which insurance company they want, how much they want to pay and they'll do it themselves. now, for those of us who are older, this is a little awkward. we've been used to our employer doing it. take my 30-year-old daughter for her, she buys everything on the exchange, whether it's computers, clothes, shoes. this is going to actually allow

her to decide which insurance company she wants, what combination of price, deductibles, network and i think people are going to like it. remember, most people who have employer-based coverage don't have a choice. their employer tells you this is the plan you're getting. on the exchange they'll have a lot more choice. i think people are actually going to like that. >> zeke, i just thought of something. i saw your interview with one of our competitors. >> you have competitors? you are the chiefs. >> that's true. in terms of saying, you know, you're quoted as saying you don't need a doctor for everything. i agree with you on that. if you can't swab the back of a throat and send it to someone and figure out whether you have strep, there's a lot of things where you don't need a really high-priced -- >> at-home pregnancy tests, we have at-home hiv tests. >> i got you on that but would you concede overall if many of these things are taken over by

nurse practitioners, there will be a rare case where maybe a doctor would have picked up something that would have been important to know. isn't the quality even though it's going to be cheaper and we need to do that, bring down the cost of all this, wouldn't you say the quality will go down a little bit from replacing doctors with nurse practitioners wherever possible? >> no. absolutely not. >> really? >> i think what you'll do is free up doctors instead of doing a lot of paperwork and a lot of stuff that could actually be done better by other people, to focus on really important cases and the complex ones that don't fit right into the box, that take more time and thinking. remember, part of the important thing is we're going to shift what doctors are doing to the high end where they're really valuable. i would also say, you know, the data actually at the moment, after four years of the affordable care act is, we've had a dramatic improvement in hospital acquired infections.

in other mistakes that show that when you actually involve the whole team and really focus on improving the quality, we can do dramatic things in this country. >> one of your predictions is you say this 2025 you say three-year medical schools and shorter residencies. half of medical school clinical training will be outside of hospitals. which also goes to the quality issue, though. >> i went to medical school. i see the medical schools today. i'm a faculty at one. we can train people in the preclinical work in a year and a half or a year. they do a year at yale and duke today. does anyone think a yale and duke graduate is not competent? then two years of the clinical rotation where you get to know patient care. we can graduate people like that now and they're perfectly competent. and the residencies, look, more than half of care is going to move out of the hospital. >> right. >> we need to train our doctors in that kind of care so they understand how to provide it.

right now, they're only trained in hospital-based care when they leave a residency. they don't do well in the office setting. we need to improve that. my scheme actually improves it much better. >> okay. zeke, thank you for that. the book, "reinventing american health care." we appreciate you coming on. congratulations on the book. >> thank you very much. >> joe? bank of england left rates unchanged. now we're waiting on the ecb's decision. plus, a "squawk box" exclusive, jamie dinan of york capital, find out what he's doing right now. that's at 8:00 a.m. eastern.

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coming up, fresh data on layoffs. and robert frank has his hands on a new report detailing the hottest cities for the richest real estate buyers. the answer to all that when "squawk box" returns. [ indistinct shouting ]

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where we e ntntertainment. wealit the x1 entertainment operating st beams ♪ my one. y.y one. my one. er1 entertainment opating stem beams tv andnet ontogether li. y.y one. welcome back to "squawk box" this morning. i'm andrew ross sorkin in new york. let's get you through some of the morning headlines.

darden has canceled investor annan lift meeting slated for later this month. the company says it will be meeting individually instead with analyst investors. darden has been under pressure from activist shareholders who want the company to take bolder steps to improve performance at its chain of eateries like olive garden and red lobster. also, take a look at shares of staples. the retailer missed estimates with its latest earnings. it also unveiled a $500 million cost cutting program which will involve closing 225 stores by the end of next year. ebay ceo, john donahoe, is telling reuters that the most activity shareholders have assured him they support his effort to resist demands by carl icahn for a spinoff the paypal unipit donahoe says 16 of the 20 most active shareholders in ebay favor hanging on to the fast-growing unit. yesterday on "squawk box," carl icahn giving us his reasons for

his push to split the company. >> you don't need to be a tech genius to understand that ebay has a company, paypal, that would do better without ebay. i said that with reynolds and nabisco. we saved motorola by splitting it up. i don't think donahoe should be the guy running or having anything to do with paypal. >> this will be some kind of drama watching it back and forth. the latest challenger report is out, it shows that the nation's employers planned to slash 2,000 to 4,000 jobs last month. join is us now, to parse through the numbers, john challenger, ceo of challenger gray and christmas. let's walk through the highlights as you see them. >> we saw jobs drop in the month of february, very low totals. down now for the year.

first two months over 9% from what we saw in the first two months last year. the pace of downsizing low. companies are not under pressure to cut jobs. we are seeing the cuts are in the kinds of areas where companies cut during periods of xmangs, not just because revenues are doing poorly. >> i want to get to the industries where we're seeing to the extent we are seeing cuts where they are. also more importantly we had just got adp numbers, 139,000 was the number. we'll get the jobs number tomorrow. given your report, how do you think that will play tomorrow? >> i do think we need to see a return to heavier job creation or there will be concerns that the economy is hitting some kind of slowdown period. we haven't seen that 200,000 job month now for two consecutive months.

when we expected it. >> among the industries that will be concerning, an industry that much was this program every morning, the financial sector experiencing what you say is the heaviest job cut activity in the february, announcing close to 10,000 job losses. what's going on? >> one of the most interesting things there, there were a lot of cuts in mortgages, the mortgage areas and banks, they've been slowing down in that area for some time. the new most interesting cut or reason for cut was announced by jamie dimon. that was they were cutting their branch banking, they're moving to an optimization rather than branch building scenario. we're seeing that in retail in a big way. we saw cuts from best buy and sony cutting stores. i think we're entering this period now, it's going to be increasing kind of theme over the next few years, the kinds of companies that service consumers have too much real estate,

whether it's banks, or retailers, they're now coming to term terms in a new way with the how consumers buy goods and services. >> when you think of retail, for every job that gets lost in the store, you know, how many jobs get taken away or actually get gained on the flip side? inside some warehouse somewhere? because you know, amazon as advanced as it is and robots that are involved, there are human beings that have to pack these things, they have to get on a truck and get to your house. there still is a long line of potential employment opportunity. >> no question that the job shift from kind of the outside jobs, in-store jobs, retailers, clerks, people in the store to jobs in the warehouse and in

transportation. but once the websites are set up, once the technology is set up, you really don't need as many people. so no question these operations do need fewer people long term. you look at amazon versus walmart. they need fewer people in the economy. >> i never asked you this before. we talked about it on the show but i'm not sure with you. there's this book out, "the second age of the machine" how we'll outinnovate ourselves in terms of jobs. where do you stand on that idea. >> every era changes the kinds of jobs where people work. we'll move away from the kinds of jobs -- we saw it in the '80s and '90s with manufacturing, fewer people in the factories. >> overall you don't think it's going to decimate the work force or we're at a paradigm shift. it used to be the tv would kill the radio. everything managed to still continue. longer term?

>> i'm not buying that. i think that we'll move more people to in-service jobs, more health care, more teaching and coaching. more personal kinds of service types of roles. i think the economy shifts to what technology takes over an area, people then provide their work, move into their work areas in new areas. i think it will be service in the future. >> john, thank you as always. >> thanks. >> joe? >> never different this time, andrew. you should know that by now. >> never different. >> same with the weather. this has all happened before. the corporate buzz stories put into perspective, ebay, tesla, apple and more. and later, where do the super rich invest in in terms of property? we have a list of the top cities in just a bit. "squawk box" will be right back. s could save you fifteen percent or more on car insurance. everybody knows that. well, did you know that when a tree falls in the forest

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that are powered by the moon. ♪ she can print amazing things, right from her computer. [ whirring ] [ train whistle blows ] she makes trains that are friends with trees. ♪ my mom works at ge. ♪ let's look at the futures, up 30 points right now. a flat session yesterday. about 1873 on the s&p. we call that 23 s&p points above the close. we're up for the year. up another 2 today or so.

>> carl icahn called into the show yesterday. he had a lot to say about ebay. rob cox, the global editor and co-founder of reuters breaking news. carl icahn's point is that paypal should be split off. he says it's the worst corporate governance he's ever seen. what do you think? >> i think the corporate governance is a side show. i don't think that's the main people should be looking at. would the companies be worth more if they were split up? in 2007 we wrote that paypal would be more valuable on its own. that argument still seems to me to cut a lot of weight. that's where he should be focusing. john donahoe has been out and about talking to people.

in fact to folks yesterday, was saying that it should be -- this is the question they ask themselves every year. they aren't satisfied yet that splitting up would ye crate more value. i still think there is an argument for doing so. one of the things i'm thinking, why not create a tracking -- remember the tracking stocks. >> those were screwy, though. >> they were terrible. they had bad governance. you got a virtual economic interest. if it's about value, why not see what the market suggests. >> rob, isn't part of what carl suggesting structurally, you could get real focus. if you're getting a tracking stock you're shuffling paper. >> absolutely. one of the arguments they make, they say they get 30% of new customers to paypal from the ebay auctions business. that of course implies that 70% are coming from somewhere else. that 30% number is shrinking every year.

i think that's true. you could do a 20% -- put 20% on the market. you then still have control. because i think there's obviously a concern about this thing being bid for if they put it out there by a visa, mastercard or whoever. >> if they had sold it back in 2007 instead of splitting it into two separate stocks, they would have left a lot of value on the table. >> as a shareholder you would have gotten both stocks. you could have held the auctions business and -- >> if it's split up it's one thing. if they sell it, you have potential value. >> this is the argument a shareholder will make, i want to own the fast growing payments business. this is the hot stuff. everyone wants to be in this business. not that the auctions business is bad. it's e-commerce and actually a larger, by value, business at the moment. i think that's -- the other way to think about it, rather than splitting off paypal, isn't it

actually paypal splitting off ebay. >> interesting question. let's talk about apple. which was another target of icahn's. he seems to have backed off, says tim cook is doing a great job. we did see the departure of the cfo this week. what does that mean? >> it's interesting. i pulled the camera back as it were and thought what does it mean that peter oppenheimer is leaving? he's been there for a very long time. he's been managing a treasury of 170 billion of cash, nearly $500 billion market cap. he's going to the most conservative establishment board ever. this is all orchestrated. he's going to goldman sachs. it just struck me this is the difficulty that apple has, one of my colleagues wrote a piece about this, which is that they are a big, big company. but they need to think small or they need to think nimble, need to think creative destruction. they are the destroyer, right?

in the r & d part of what they do. new products, iterations of their existing products, tv, wearable devices. that's really hard to manage that big company feel when you are actually out there trying to be the disrupter. and i think that's why you look at the company. we've been wrong a couple times. i think we once wrote that it was the first trillion dollar company. because by all rights it should be. the "p" is like 12. you adjust that for the cash it may be lower. the market is on 16, 17, 18. but i think that the reason is, people aren't sure they're going to be able to innovate. >> that's been a question dogging it for a while. >> yes. >> i wouldn't get to that trillion. we've gotten to a trillion a bunch of other times. cisco. >> yes. >> ge i thought at one point. they were all supposed to go to a trillion. they took a left turn at albuquerque on the way there. apple is exactly what you're saying. people think what's next?

is it a watch, a car, is it a -- what is it going to be? >> and how do you get that group of folks, you know, in that r & d lab or whatever it is, how do you get them to think about disrupting and innovating. >> who doesn't own apple that doesn't love it. >> everyone loves it. >> who's left to own it? >> well -- >> a lot of people have to buy to from other people to get it to a trillion. >> the marginal buyers, the retail guy, isn't 100% sure that it should be any more than 12 or 15. >> retail is not going to do it. how many institutions are already there? they're all there already. what person is trying to track the average that don't doesn't own apple. >> if they came out with something that blew everyone's minds. >> like what? >> i don't know, the wearable device that you connect to your tv that lets you fly. >> the ecb decision is just out. at 8:30 mario draghi will put on

his press conference to talk more about what they may be doing. tesla, that's a huge question. how do you value this? you may think apple is undervalued with this p/e rashirash -- ratio. >> the gig are entering a whole realm. they need to produce and manufacture 500,000 cars by 2020 even just to sort of justify today's market price. right? that's a lot to do. but the big bottle neck will be batteries, right? >> right. >> coming out and basically saying -- they're going to be like, this $5 billion factory is all about reducing that bottle neck and that cost which is critical to getting people to actually be able to afford 500,000 of these cars. at the same time, they come out in this annual report and say by the way you'll be able to eventually potentially be able to have a battery storage center

in your backyard so you candice connect from the grid. elon musk. it's a binary option, either going up or down. not exactly very useful. the point is, it's gone up ten fold since. >> i have my money on comcast as the next trillion dollar -- first trillion dollar company. did you see this? look who's against this. glenn beck is against the comcast. guess who else, the huffington post. when have glenn beck and huffington post against the time warner/comcast deal. >> it's about distribution, isn't it? >> the silent middle is probably going to happen, hopefully. i don't know. >> yes, yes, whether it's a trillion dollar stock -- >> well, just wait there young fellow.

that's the only stock i own. >> we're not allowed to own stocks. >> for your sake i hope it is the next trillion dollar stock. >> that would leave serious upside there. don't count out those guys. >> rob, thank you very much for coming in. >> thanks for having me on. his fund is up 14% annually since 1991. find out where jamie dinan of york capital management is making money in an exclusive interview. up next, hot cities for real estate. robert frank will join us to talk about where the super rich are looking to invest and why. "squawk box" will be right back. ameriprise asked people a simple question: in retirement, will you outlive your money? uhhh. no, that can't happen. that's the thing, you don't know how long it has to last. everyone has retirement questions. so ameriprise created the exclusive..

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that's my phone. hey. [ female announcer ] the x1 entertainment operating system, only from xfinity. tv and internet together like never before. where are the super rich buying up real estate? cnbc's wealth editor robert frank joins us with details from this report. are you global. >> this is global. >> tell me. >> this is interesting. the number of people in the world worth $30 million or more has grown by 59% since 2003. there are 167,000 people worth 30 million or more. all those millionaires have driven up real estate prices in their favorite cities. knight frank, the london real estate firm brings you about what $1 million brings you around the world. $1 million gets you 430 square feet, around 2,300 square foot.

geneva ranked five. hong kong was the second most expensive market in the world where $1 million gets you 226 square feet. the number one most expensive market in the world, monaco, 1 million gets you one bedroom. >> but no taxes. >> this is based on economic activity, political power, knowledge and influence. london ranked first with new york ranking a close second. the study says in 20 years new york will be first. the favorite city among the superrich, hong kong will be third behind london. >> how do they know that? >> they're assuming de blasio does not get re-elected. we'll see. the people i talked to, they say new york is a bargain. that's hard for most people to understand. again, they're looking at -- they're not looking at just one

city. they're looking at london, singapore, they're looking at hong kong. it's cheap. you can combine it with a rule of law where the head of the country is not going to take your money. with great culture here and you know, a lot of people say that is why new york prices will go much further and will get closer to what we're seeing in hong kong and monaco. >> when you first said what does a million dollars buy you, to do it in square feet is the way to do it. in the cities you mentioned it doesn't buy you much, doesn't really buy an apartment. >> certainly not in monaco and hong kong it's like -- >> you can't live in 230 square feet, can you? >> no. when i talk to the wealthy, they're not talking about second or third homes anymore. they're talking about real estate portfolios. they want deverse ficti vediver

diversification. people look at return on investment, you can rent an apartment much better in new york. a lot of these places except for once or two weeks a year or they're getting income from it. they like that. >> did you go to the 30 or 40. are there other cities in the united states? san francisco? >> yes, san francisco is in the top 100 but very low. again, most of these new millionaires are in the emerging markets. it's the chinese wealthy. >> no aspen anywhere? >> aspen is also in the top 100. that's not a big market for foreigners per square foot. the average price in aspen is over $6 million. the average sale price for a home. it has to be up there. i stopped looking at the top 100. >> paris? >> paris is up there. >> got to be. >> in the top ten. >> got to be in the top ten. >> paris is a tough market. there's a lot of people selling in paris. >> because of their own de blasio.

>> de blasio. >> exactly. >> and to your point, when you look at the western markets, it's tax driven. taxes play a big part. >> all right. you are everything rich to us here. >> everything expensive. >> you love doing this stuff. >> yes. >> and you somehow -- you're not that bitter? >> no, no. i don't hate these people. >> all right, robert, thank you very much. updates, new developments out of the white house. as it continues to monitor the situation in ukraine, the president has signed an executive order that authorizes sanctions on either individuals or institutions who threaten the sovereignty of ukraine. it also covers those who misappropriate state assets. in addition, the state department says it will deny visas to individuals who have threatened ukraine's sovereignty. things have gotten messier. crimea's parliament voted to join russia on thursday. it's set a referendum within ten days on that decision an a

dramatic escalation of events. the new ukrainian government in the meantime declared this referendum illegal. it's opened a criminal investigation into the prime minister of crimea, sergei askinov. >> andrew has been reporting an assignment in new york city. he'll be leaving us now. in fact, i don't know -- >> he left us already. >> supposed to leave at 8:00. i was going to say good-bye to him. we went to him. as you can see, it's like -- i feel like clint eastwood. talking to an empty chair. anyway, we will see him tomorrow. he's going to be in washington, d.c. where he will be joined by alan greenspan and it's jobs friday. hopefully we'll have other movers and shakers in d.c. ♪ i want whatever she's got >> we'll go out with the tones

of this song. >> this is the one you've been singing. when we return, our exclusive interview with jamie dinan -- founder and ceo of york capital. let's look at the futures ahead of jobless claims and productivity data. we're up about 25 points. we'll be right back.

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mergers, acquisitions, an exclusive interview with jamie dinan of york capital. why he thinks vodafone and at&t could be the perfect connection. everyone needs to look out, especially your smartphone. meet the man helping protect your information from getting into the wrong hands. everyone loves bacon but it's even better in a bowl. >> we're turning bacon upside down. >> this sizzling story and the sweet smell of success are just ahead. >> everything is better in a perfect bacon bowl. >> as the final hour of "squawk box" begins right now. ♪

>> whoo! ♪ whoo >> they sing that better than you. >> did you know that was coming. >> no. >> no, you did not. why don't they have on sirius examixm a pink floyd channel. >> i don't know. maybe they haven't authorized it yet. >> make it happen. welcome to "squawk box," i'm joe kernen along with becky quick. we're up for 2014. we're just 30 minutes away from jobless claims data. we're also going to monitor mario draghi's comments after the ecb left rates unchanged. that news conference is expected to start in about 30 minutes. almost exactly. a little bit less. >> in our headlines, secretary of state john kerry will be meeting with russian's foreign minister for a second day today. he tried to encourage sergey

lavrov to meet with his counterpart yesterday. lavrov decleaned to do so. the courthouse has authorized sanctions against any institution or individual accused of interfering with ukraine and sovereignty. the new ukrainian government fought back and said crimea as a part of russia is illegal. costco missed estimates as profit margins declined. this was a surprise. we've been looking at the monthly sales figures the whole way along. sales number were pretty good. it was really the profit margins that were the big concern. that was because there was so much discounting taking place after walmart slashed prices early and unexpectedly this holiday season. manhattan district attorney is expected to announce criminal charges against several top executives of dewey and labeouf.

the firm once employed 1,300 people with 26 offices around the world. our next guest is one of the hedge fund industry's biggest names. he joins us right now with an exclusive interview. joining us is jamie dinan. york has $21 billion in assets under management and was up 21% last year. an an annualized basis, they came up 14% since its inception. great to have you. >> great to be here. >> you are somebody we've been wanting to talk to, wanting to sit down with, because you look at things in a great way. you have a phenomenal track record. why don't you tell us about what you're seeing right now. people have been concerned about the situation in ukraine. are you? >> whenever you hear boots on the ground you have to be concerned obviously over the weekend we heard boots on the

ground and you saw reactions worldwide monday. hopefully we dodged a bullet, no pun intended on this one. it seems like things have calmed down a bit. i would caution, this is a very emotional thing. people are looking at this clinically. i think there's a lot of emotion. i think putin feels strongly about russia's role in the world. don't discount the -- what i would call the volatility of emotions. >> if we take geopolitics out of the situation for the moment because something could happen anytime anywhere, you have to realize that, if you were to take that out of it, wheat do yu think about where the market stands? >> i think what you saw last year in 2013 was a major move up. most of the western economies markets. most people look at that as kind of what i would call a bull

market, a beta move. to us we saw less of a beta move and more of an engagement move. we saw not just investors re-engage. we're seeing companies re-engage. while last year you had a major market move, this year you're still getting enormous amounts of core productivity and deal flow. individual stocks are performing quite well. the average may be roughly flat, slightly up for the year but you can have a lot of winners relative to the market that's what we're seeing right now. >> so that's the fancy way of saying it's a stock picker's market. >> 14% is unreal since '91. i wonder about the beta. have you had down years? that's after fees, too, right? >> it's after all the fees and expenses. yes, we have had down years. that's probably a good thing. no one would believe the numbers if you didn't have down years. >> are you down 30% and up 60% or would i have to -- >> we're much more i would call

the tortoise versus the heir. >> flat to down. >> other than 2008 which was not a good year for most people. we lost about 25%. >> 25. okay. >> our typical year would be a single digit down year. i think we've only had two if i remember right. >> only two down years? >> tech bubble and september 11th, all that stuff. >> a typical year is going to be in the 20%, 30% type thing on the upside. >> wow. >> just don't give it back. i find the trick to investing is try not to give too much back. you always have winners. okay? every day you wake up and you don't go to work say i want to find losers in my portfolio. you want to try winners. the key is make sure your losers don't drag your winners down too much. >> when you start losing you sell them? >> you i don't have to have stop losses, discipline. every market is different. because you often times have to

differentiate where the markets are telling you you're wrong versus just the market is repricing correctly. we have disciplined stop loss rules. we tend to add to our winners. we don't add to our losers. over time it's worked. >> i mean, that's five years for a double rule of 72. the power of compounding is phenomenal. if you can just hang in there, this is what everyone should try to do. we wouldn't need -- >> to worry about pensions. >> or any of that stuff. >> you have to work your butt off. >> money finds you, too. what's the size now? >> just over $21 billion today. given we started with $3.5 million, it's a great country. >> that's awesome. great. >> thank you. >> let's talk more about the macro. we're going to talk to you about stocks that you like individually in a bit. i'd like to hear more about your investment philosophy, too.

we've been talking to warren buffett. he talked about how individuals could put money in an s&p index tracking fund if they don't know thatch about it. if you do know more about it, where would you be looking, the areas, arenas that are some of the best investing areas right now. >> with all respect to warren buffett, when you look at on the averages, he probably is right. there's a lot of leakage in fees. there's a lot of average people in every industry, not just money management. the key, quite frankly, is to try to find the good ones. he's one of the good ones if you invested in berkshire hathaway. obviously he has all his money in berkshire hathaway because he believes in that. myself, my partners, we have over a billion dollars of our own money invested in our own funds because we believe in that. there's a lot of activity, corporate deal flow, companies taking advantage of debt.

debt is cheap, relative to equities. you see an enormous reengagement. companies run by ceos who are like the proverbial generals where they are fighting the last war, the last war was the global financial crisis. now five years later, yao you're realizing the world is not coming to an end. europe is not going to blow up. i only have a finite amount of time to create value. debt is cheap. there's opportunities out there, let's invest, whether it's buying other companies, investing in bricks and mortar and you're seeing that take place. that's why you're seeing growth and the markets reacting so strongly to the upside over the last roughly 15 months. >> is the u.s. market your favorite place right now? >> you know, it is our favorite place if you looked at where our dollars are invested. we're majority invested in north america. if you look on the margin we're increasingly moving into the european space. originally it was a european credit. keep in mind the european banking system is nowhere near shall we say through the crisis.

a lot of the northern european banks are reluctant to ren to the southern peripherals, greece, spain and italy. we have a big office in europe and london. and they're really, really busy. there's a lot of stuff going on. today i was on the way over here and i was on my blackberry looking at the bloomberg news. one of the big headlines is vivendi's sfr, a mobile telecom unit, there's a multibillion dollar bidding war for it. there was -- they had a potential sale, weak telecom showed up with a $15 billion cash deal to compete with this other company it was trying to buy. you're getting bidding wars in europe by european countries. it's not just u.s. companies moving to europe to take advantage. we think european equities are apples to apples still less expensive than the north

american counterparts. there is some growth there. their existential crisis is behind them. we think europe is 6 to 12 months behind the u.s. in terms of corporate deal flow. >> you were on your iphone looking at cnbc.com. you were on your iphone looking at cnbc.com. >> blackberry? >> all the kids gave me a hard time. you're a dinosaur. >> the problem is every time i try to type on my iphone i keep missing the keys. >> same problem? >> 2014 dictate. you can dictate. it's beautiful. you'll send funny messages to people. >> i'll show you the keyboard i got to put on to your iphone. >> is that the typo thing? >> there's a side one, too.

i'm upgrading to the new one. >> we'll exchange christmas cards. >> okay. we'll continue this conversation. after the break, jamie dinan will talk more specifics. later this morning, we're going to talk bacon, bacon, bacon. how one man's love for salty meats have talked into a product that has made more than 2 million bacon bowls. that's a lot of bacon. have you seen these things? >> blah? >> more bacon than i put on a blt. jane wells will join us with that story. as we head to a break, check out the "squawk box" market indicator. the futures are indicated higher, dow and the s&p in the green. we'll be right back.

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just one second. let's get back to our special guest. i want to read this, dictate it to you. >> he's teaching jamie and i together. james dinan, founder, chairman and ceo of york capital, we're going to continue our interview

now with jamie. my first question is how many really good people, better than you, at doing this do you have at your company where you sort of trust them to pick the situations that are going to deliver the 1 % every year? now read that. >> the nice thing about york is, i have a lot of partners. well over a decade and the nice thing is, when the students pass to a teacher. the main reason i taught so many people what i know. >> your own stuff? >> the stuff you learn by making mistakes, quite frankly. >> what's the three top things that you would tell me if i wanted to try and do this? >> if in the big picture quite frankly it is focus on liquidity so you can get out when you're

wrong. be diversified for the simple reason you never know where the dangers will hit. >> long and short, different countries, different asset classes? >> you just want to have no one position that can basically damage you or take you down. you always want to be in business tomorrow. >> how many positions would you need them? 100 probably. >> no. less than that. 50 to 60. make your position size more a function of not how much you can make but how much you can lose. manage the size based on downward loss perspective, not upward potential. it's the losses that will hurt you. as i said at the beginning, everything has upward bias. that's what you do and that's what you're looking for. you can get hurt and you can't get out. leverage, if you have too much of it, quite frankly you lose control of your destiny. you have to sell.

more importantly, somebody is elle it -- telling you you're telling -- the numbers you actually mention that you've done, we've done on average with no leverage, which i personally think i'm most proud of. >> if things went right you could do done 25%. the down side is up 3%. >> you never know what tomorrow will bring. >> combined with this you probably want companies that are in unique positions that have great management? then you do all the other normal stuff after those three overriding principles. but then you look at the fundamentals of the company. >> you do. we tend to be specialized. we specialize in invent-driven investing which includes equity and credit. try to spend more on the equities side on this particular, you know, program. and basically what we're looking for is companies undergoing extraordinary change. think of what we call in play. and we're looking to predict

what's going to happen tomorrow, is there a value gap? is the market going to close that gap? it's very much investing, not looking at your so-called proverbial dashboard but through the wind shield, where is this company going, knowing there will be a series of events that will prove you right or prove you wrong. you don't have inventory that does nothing. you can hedge that out or specific alpha shorts. >> are you comfortable giving us some of your favorite positions? >> sure. maybe i'll talk a little bit about what's going on in europe quickly. a couple european positions running out of our london office. we like activism, we're not activists, we are active investors and we actually look at what investors do and particularly activist investors to get companies to focus on shareholder returns. ideally sometimes we can be in these names even before activists surface. denmark, there's a big danish

bank called donskabank. this bank moved a lot. but last year, an activist scandinavian player in europe, removed the ceo, brought in a new guy. the new mandates are get the profitability of the bank up. this stock trades about back value. it's up 0.8 times book when he took the job. getting along with noncore markets, places like ireland, to focus on the home office, denmark. the scandinavian bank will trade 1.3 to 2 times book. they get up, this is a mandate into the 13% to 14% range, which we think they can do. you're going to be looking at a bank trading 4 or 5 times trade book in the next few years.

a similar bank in holland, ing, you may know the old ing direct here. they've sold all that. all they have left is a dutch bank, insurance company. they're spinning off that insurance business this summer. pro forma, we think they're setting the bank up for less than book. this is easy, we see 20%, 30% really this year. almost everything basically. >> can we do some numbers? do you have to be anywhere? can you hang out? >> sure, sure. >> you dragged me out to new jersey, i can definitely stay. i saw the line to the gw bridge back. >> no rush. >> if you make any comment -- >> i wonder if christie was blocking it. >> don't say anything about armpits or dove soap or any of that either. coming up, another piece of the jobs puzzle before tomorrow's big number. jobless claims as well as revised productivity.

how many mistakes were on siri? >> none except you said the whole thing into the address part. >> every word was perfect. >> you can dictate. >> he can teach us how to do this. >> you can dictate. >> the whole thing he said wasa >> in general people say that about me. thank you. later we'll talk -- that's about the last thing they say. mobile security and phone hacking with the founder of lookout, a disrupter is fighting to keep the information on your smartphone start and out of the wrong hands. we'll be right back. ♪ ♪ humans -- even when we cross our "t's" and dot our "i's," we still run into problems. that's why liberty mutual insurance offers accident forgiveness with our auto policies.

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when we come back, we have key economic numbers that could move the markets. we have jobless claims and productivity numbers that will be out, plus, jamie dinan stayed here. he's with us and he'll talk about some of the top picks right after we give you though numbers. take a look at where the u.s. equity numbers stan. dow up by 41 points, s&p up by 4.5. "squawk box" will be right back. tdd#: 1-800-345-2550 trading inspires your life.

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welcome back to "squawk box," everybody. we're about a minute and a half away from weekly jobless claims and productivity and cost numbers. we'll be waiting for those number. in the meantime, we have an extended period of time with jamie dinan. we'll talk about specifics right after the numbers. beforehand, what do you think about what's been happening with the jobs picture, the weather, the economy, how do you try and figure it all out? >> it's tough with the weather. i really thought we would have a

much morrow bust economy january, february, most numbers. most of the numbers are coming lower than expected. at some point it's not the weather. i think there's going to be a degree of deference that the weather has a huge impact. things will catch up. i'm still updata, though. i think everything is looking more and more we growing the economy, engage economy and jobs should follow. >> if we get a lousy jobs number tomorrow, a government jobs report wouldn't surprise you? >> i think people are expecting an okay number. if it's lousy, people will start asking is there more to it? then there will be a view that janet yellen, the fed will come to the rescue, bonds will go down, in other words, interest rates will drop. people are looking longer term. i'd be surprised if it was a lousy number. >> adp was worse than expected but ism was the disastrous

number. we get the jobless claims in 15 seconds. rick santelli is standing by at the cme in chicago. steve liesman is in studio, ahead of these numbers, the market again, looks like it's fairly upbeat. dow futures are indicated up above fair value right now. let's get to rick right now. >> fourth quarter final productivity nonfarm, of course, is 1.8%. that is not the 2 plus we're looking for. it's close, close, to half of the 3.2 that we had on our last read of the last quarter. this is a dispoiting number. unit labor costs dropped 0.1%. jobless claims, for the most recent week, they dropped a lot. because we revised last week 348 to 34. that isn't huge. then we take it down to 323,000.

so we're down 26,000. that's rather significant. and of course, that's never bad news. the real issue is whether we actually create jobs and we put the unemployed back to work. continuing claims, 2.9 million. on the chart right now, one of the issues that many are paying attention to is if you look at average productivity, starting in early 2011 to our last read not including what we just put on the screen today, that averages a little over 1%. the historic average going back two or three generations is closer to 2.5%. this is an issue to pay attention to. and we will continue to monitor how the new read, of course, may slightly lift that somewhat soft long-term average. back to you. >> all right. rick, thank you. checking the markets on this news, we've been up most of the session. we continue to look a little bit better for this morning. steve liesman has been -- it's

hard to -- do you see what you're doing? >> i'm pouring, p-o-u-r-i-n-g. >> you're pouring. >> i'm interested -- pouring through. >> don't you pour over? >> it's the wrong preposition there. >> go ahead. >> i mentioned what rick talked about, the difference in productivity compared to what it's been. i think, rick, it's a little high. it was 2.5. you're definitely right, things have stepped down. there's a big debate out there. i don't know if our guest host has thoughts on this. the long-run productivity will be lower than it had been in the past, which is a little weird. think about where's the devices? we have all the devices, spending all the money on this stuff, all the money on connectivity and this. where's the productivity? it should show up in a couple places in wages. it doesn't show up there. it doesn't show up also in gross domestic national product.

so our guest host here, jamie, do you have thoughts on that? is the long run outlook for the u.s. economy in your opinion less than it had been? >> that's a tough one. okay. you know, you have to be at the end of the day, despite though, i recall nuances, you have to be bullish, on a relative context on the u.s. economy. it's still the most vibrant, most dynamic, creative economy committee world. i i also think productivity is hard to measure. you have to keep in mind, it's hard to measure. productivity on the service side of the economy, the majority of this country now, is much more difficult to grow as opposed to classic manufacturing side. but when you look at -- take -- becky and i were talking about cars, blue tooth, sirius xm radio and stuff, today what's really happening, though, is this productivity, the things you can do, you can do so much more, i don't think you measure.

the quality of life is improving. >> you can't measure it. >> i don't think you measure it. >> there's an e-mail chain going on between the guys that wrote the book "second age of the machine" and robert gordon at northwestern. gordon is a k-- that's going to mean lower growth in the united states they thinks that's the investment thesis he thinks people ought to follow. you know the guys, we are them on from "second age of the machine," sometime in the future the machines will make the machines that make the machines. >> their collective knowledge will be more than a billion times all of human knowledge. >> it's not showing up in the data, though. all this grade advancement, jamie has an interesting concept.

>> it's 2014. this is 2040. >> if i can add, one thing, listening to you, everybody who went to college and studied economics, they all learned about the reverend thomas malthis who had a beautiful plan that man was doomed because the population was going to grow faster than food. it was not a nice picture. in fact, it was pretty bleak. obviously ricardo had a different view. productivity kicks in, things happen. look at the united states today. okay? we're looking at having a deficit this year of like roughly 3% of gdp. a couple of years ago it was 10% plus. everybody thought we would never get out of those deficits. things are not static. maybe even you two -- i never thought we'd be where we are today. things are not static. >> great point. >> very quickly, guys, the model i ran this morning, it may be a double digit number, the model that i ran. which is not the most reliable number out there. the one i ran is a double digit.

>> high double digits. >> how did the market react to that? double digit gains. a double digit number, not even 100,000 on the jobs report tomorrow. >> less than 100,000? >> yes. >> i think the mark set expecting probably less than 100,000, expecting high double digits versus low double digits. >> rick, what's up? >> i'd like you to ask our guest, i didn't find his explanation for the lack of productivity very good. i think if you don't get a good answer to it, you end up like japan. some of the new research i see, everybody trying to explain the 25 years of malaise, it really is a compounded lack of productivity ultimately playing out in the real time. and the second issue is, as far as the deficit he's talking about, i agree, it's smaller but only because it was so much bigger. we're now finally getting in the range of a budget deficit, 450 to 600 billion. that's in line with previous administrations prior to '08 and the cbo doesn't have it ever going into surplus. the real issue is, you're adding

smaller amounts to the national debt. i'd like to know from our guest why that's a good thing. even though it has improved. because of mostly energy which is outside the realm of policy anyway. >> okay. i mean, that's -- >> the national debt continues to grow, right. >> it's going to always continue to grow. >> unless we have a surplus. >> unless you get bill clinton president again. >> we may have a different clinton. >> the key number, though, really, is debt relative to gdp and debt relative to the growth of gdp. if you look at the numbers that came out just i think earlier this week, that they're talking about, this going down to % by like 2018, 2019 -- >> if obama gets his policies it

would go down to 1.6. nobody believes those policies would be enacted. they head back up. that's somewhat worrisome. very quickly, the issue, though, is i think the ability of the country to pay. and that -- we have to wrap up. >> okay. >> a debate for another day. >> steve, thank you. rick, thank you. let's get back to jamie and talk more about specific stocks. we've been promming people this. one of the themes you see is continued industry consolidation. you think there will be clear winners as a result of that. you want to talk about that? >> sure. i was here on the show right before christmas. i talked about american airlines, u.s. airways who just bought american. i was upbeat with the prospects, four major airlines controlling basically 85% of the industry. since american stock has gone up about 50%. you know, the stock is now in the high 30s. it's in the mid-20s back in december. quite frankly, we see an

industry that's rationale, basically running it like a business. you see americans' margins continuing to improve. this company could easily run $6 plus next year. we think it's $60 plus potential stock. once of the things we do every day at york, should we keep it, should we sell it? if we didn't own it today, would we buy it today? in american, the answer is a resounding yes, which is why we continue to own it and we're still upbeat. one more interesting consolidation play that's taking place right now is a hostile takeover deal when men's warehouse and jos. a. banks. this is a $.5 million market cap. the remarkable thing is the amount of cost savings that could potentially come from this transaction. $100 million to the $150 million of the so-called synergies from this merger. back that in context to what

jos. a. banks makesp this their ebitda is about $130 million. you can almost double the profitability. to look at where men's warehouse is, it's up 20% since they launched their bid for the takeover. hopefully there will be a transaction that will benefit both shareholders. >> do you end up some of the inherent value by the hostility? >> after the fact everybody makes up and you know, it's a new boom, new sweep, new set of rules. and people usually fall in. plus, you'll have the same leadership at men's warehouse running the combined company. if you believe that the deal really has huge synergies, which we do believe, even men's warehouse at $55 now, up from $45 when this started, men's warehouse can easily earn $5, $6 a share over the next two, three years.

put a 15 type multiple on that, you're looking at $75, $90 type stock. there's real, you know, value in even like midsize companies where these consolidations offer enormous amount of cost cutting and synergies. >> how come hertz is event driven. >> hertz is event driven initially, as you may or may not know -- >> so to speak. >> they bought dollar thrifty. >> yes. >> at the end of 2012. huge benefits from the consolidation, namely taking going from four to three players. last year, revenues, rates went up in the industry in six to eight years. they rationalized the fleet, sold off excess fleet. today we still like hertz because in addition to we think the leisure part of the economy is still doing well. >> yes. >> you have three major players, revenue synergies, cost synergies are still being played out. they have a very good equipment

rental business. we think this could be spun off at some point. it would make a lot of sense for united rentals to own it. we think there's ability to buy back more stock. these are the events we kind of like. we think the fundamental business is good as well. >> thank you. >> thank you very much for having me on. >> we really appreciate it. when we come back on "squawk box," staying connected to the world has its risks. the founder of lookout will join us after this. you've seen the commercials, now meat the creator of the bacon bowl. that story just ahead. "squawk box" will be right back. ♪ [ girl ] my mom, she makes underwater fans

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welcome back, everybody. as target struggles to manage its cybertheft crisis, ceo greg steinhoffel says we are undertaking an overhaul of our information security and compliance structure will be conducting an external search for an interim cio who can help guide tarring ut through this. tell us what lookout does. >> lookout is focused on taking information and making the world more secure as it becomes more connected. if we look at the pc-based

security, we think of leverage big data to get ahead of threats before they are pervasive. >> how do you do it? >> when you think about our approach, we're living in a world of mobile and cloud technologies being the new normal for usage for consumers and enterprises. we leverage the power of our collective 50 million users to aggregate information globally. we leverage that big data and predictively analyze when and where the threats will occur and use that information to stop those threats. >> so who are you working with? >> so lookouts to over 50 million people around the globe use are our products, that ranges from end consumers to mobile network operators and some of the largest enterprises in the world. >> can you tell us names? >> when you think about the types of enterprises, at&t, sprint, t-mobile, are all deploying this rapidly and at

scale from the smallest businesses to the largest businesses in the world. and that ranks from companies in north america, western europe as well. we launched a partnership with deutsch telecom in germany, most notably. >> how do you stay ahead of the bad guys? do you consider yourself a hacker? >> it depends on your definition of a hacker. by my definition, yes. most people that work at lookout think that. hackers are people who think about systems and are innately curious and do something with the system that the creator may not have intended to be possible or imagined. by that definition, absolutely so. >> how do you make money? >> when you think about lookout, what we've built is a join the network of users around the globe. we have a subscription-based model where there's a monthly recurring revenue that's associated with the protection of our users. that ranges from $3 to $7 a month, depending on the product and the service. that's delivered both through

end-user subscriptions and end users as well. >> are you profitable yet? >> we're a private company and don't disclose that but our profits are off the charts these days. >> coming up, jim cramer from the new york stock exchange and then we'll fry up some bacon bowls with jane wells. it's just a coincidence that pork is at an all-time high after smithfield sold that company to the chinese. we'll see. >> i think it's the bacon bowl. >> maybe it's bacon bowl. we'll talk about it. dream has been turned into reality for me. i don't even know how to answer that. i mean, no one knows how long their money is going to last. i try not to worry, but you worry. what happens when your paychecks stop? because everyone has retirement questions. ameriprise created the exclusive confident retirement approach. to get the real answers you need. start building your confident retirement today.

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let us get down to the new york stock exchange where jim cramer joins us now. jimmy ran a hedge fund. you listened to jamie dimon. did you run it the same way, jim? >> it's fun you say that, we would come in every morning and they would say, look, let's just whiteout the basis, what would you buy right now? we still liked it, then it stayed. what would you buy right now was the quintessential question, dimon, you're really good, man. >> that is incredible. the same way of looking at it. >> as a stockbroker it used to be, jim, i wouldal say, normally

it would be if i'm writing the ticket and if i'm supposed to write buy, i'm supposed to write sell. and if i would do it, seriously the hardest thing to do, for example, you buy a stock it goes up 60%, the hardest thing to do -- >> sell it. >> no, is to buy more. it's so easy to say, hey, nobody -- nobody ever went broke taking a profit, you know, you always say that. the hardest thing to do if you are up 60 is to buy more, isn't it? >> well, i think that -- yes. when united air reported a number that was weather impaired and for just a brief moment american did go down. i'd like to ask jamie whether that would be a moment $6 number and buy up. >> it seems like maybe you should sell a little bit of a position if it doubles. but remember amgen went from 1 to 1,000 in the '80s, people that held on -- or anyone that

bought berkshires in the 60s, some things you should just hold forever. >> once you've taken out the house's money, you can never lose. you took out your house's money and you let the rest run and you don't even have to think about it. it's never going to turn into a loss again that's what you do with american or any one of these. >> we'll have to ask him next time, he just left. >> man, he's terrific. productivity i'm not sure he's on -- >> we didn't realize he didn't have an ifb so he didn't hear rick's question. that was a mistake. >> i was thinking he was thinking it was an attack or something. >> he was here for a couple of blocks and he didn't have an ifb and he stayed longer than we were going to keep him. >> i thought the silence was deafening. >> it was our mistake, we figured it out after he left. thanks for asking. we were able to clear it up. we'll see you in a few minutes. be sure to catch a special interview on "squawk on the street," nike ceo mark parker will be joining the gang at post

nine to talk about the business and the launch of the world cup, it will be phenomenal. make sure you stay tuned for it. up next jane wells is talking bacon. >> right now nothing is more expensive than bacon. you know who is happier than a pig in -- the guy that came up with these. but is he bringing home the bacon? we meet him after the break. ♪ for access to one of the top wealth management firms in the country. ♪ for a team of financial professionals who provide customized solutions. for all of your wealth management and retirement goals, discover how pnc wealth management can help you achieve. visit pnc.com/wealthsolutions to find out more.

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i've noticed this, welcome back. the price of lean hogs has spiked over the past couple of months over fears of a new swine flu virus and bacon is really expensive because you don't have pork bellies anymore. or is it the sale of bacon bowls or is it that jane wells discovered bacon bowls and they are flying off the shelves? she joins us with more on this product that has fat profits it says, jane. >> well, joe, if it's about bacon, i'm all over it. >> me, too. >> you want to know why bacon is up 18% in a year? this. >> eggs and hash browns for breakfast, it's better in a bacon bowl. >> the perfect bacon bowl is the most porktastic products. do they actually turn bacon into a bowl? >> that was kind of pretty.

i bought a set and put them to the test. you can use both the oven and the microwave, they work, though i recommend you spray the bowls with pam because the bacon though it's greasy can sometimes stick. who came up with this ingenious product? a research histotologist named tom jensen liked to tinker and couldn't believe no one thought of this product already. and edison nation developed it with the folks from as seen on tv. how many money have you made off this yet? >> actually, i get my first check within the next month, but it's only for fourth quarter of last year which is a small time. and in january it went into walmart and now it's in targets and walgreens and everywhere and so i won't get another check in another year and it will be a waterfall coming at me i hope. >> do you think you can stom to be a research histologist after that? >> i think so. >> what do you think of all this? >> it's surreal. i don't know how to -- i can't

comprehend it yet. you know, it's exciting. i'm here. i mean, i've never -- it's cool walking around the nbc lot and i hang out with you for a while. >> that's really cool. >> it is very cool. >> it's the highlight of your life. what a aha moment that led to this brilliant idea and does he think he's making america fatter? our in-depth report on cnbc.com. guys? >> i want to wrap a krispy kreme around the thing and wrap the bacon around the krispy kreme and take a shot of tequila and -- >> is it five or six pieces of bacon you use to make that bowl? >> it's three per bowl, so i had four bowls and you got a dozen pieces. >> i have to say i thought it was more bacon than i would have put on a blt when i first saw it. three pieces not so bad. >> is there ever too much bacon. >> i like bake been, but too much of a good thing, anything. >> everything bacon with cream cheese and bacon. have you ever tried that? >> no. >> it's good, too.

>> bacon and tequila, i like it. >> bacon and tequila with whipped cream. >> what? i like bacon, but, man, you guys are off the deep end with it. >> no. >> jane, thank you. >> bacon. >> i wondered about this guy and what happened to him. great to see you. right now it's time for "squawk on the street." ♪ i got to testify pick a spot looking extra fly for the day i die ♪ ♪ i'm the toughest guy good thursday morning. welcome to "squawk on the street." i'm carl quintanilla with jim cramer at the new york stock exchange. david is off again today. got a lot to walk you through this morning including some news on retail, on restaurants. futures relatively steady after the mild declines yesterday. the ten year, jobless claims lowest since january. the bank of england and the ecb also held steady. europe's having a decent session and the nikkei above 15k. the roadmap begins with three big